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DAC Aid Peer Review of the European Community

10/06/2002 - The OECD Development Assistance Committee (DAC), meeting in Paris on 6 June 2002, discussed the Peer Review of the European Community. The DAC Chairman, Mr Jean-Claude Faure, summed up the following DAC findings. The European Community is a large donor with global reach and specific capabilities through its regional partnership agreements, linking trade and political aspects with development co-operation. The European Community has substantially improved its development policies and strategies since the last review in 1998, and remains committed to implementing all the elements of its reforms in the upcoming years. The European Commission's ambitious reforms also aim to improve its capacity to fulfil its primary aim to reduce poverty through the European Community aid programme. Further to the positive steps already taken on policy coherence, the DAC noted the need to improve the coherence of a broad range of Community policies with its development objectives, with clear benefits for the world's poor. While commending the efforts in development policy and management reform, the DAC encouraged the Commission to promote further its comparative advantage, to increase its visibility in the field, and to focus on measurable results in its regional and country programmes.

The European Community has increased its Official Development Assistance (ODA) for two consecutive years. It rose by 21.1% to USD 5.91 billion in 2001 and by 13.4% in real terms to USD 4.91 billion in 2000. This is part of broader E.U. external relations activities (some EUR 11.7 billion in 2000) which support countries' efforts to gain accession to the EU, help maintain stability in neighbouring regions, and provide development assistance. The European Commission plays a co-ordinating role with its Member States, encouraging them to raise the average of their ODA from 0.32% to 0.39% of Gross national income (GNI) by 2006. The DAC welcomes these efforts to raise ODA.

The DAC commended the work done by the European Community to enhance its development policy framework since the 1998 DAC Review by setting out six priority areas to achieve the principal aim of poverty reduction throughout the Community's global aid programme. The DAC noted some major challenges for the European Community in translating this poverty reduction aim into more effective ODA country allocations. The European Community should also aim to improve the developmental impact of its sectoral allocations, taking account of cross-cutting objectives of governance, gender equality, and environment within the context of the primary aim of poverty reduction. There is a need to adjust ODA allocations in line with these priorities, recognising the importance for European Community policy of increased economic growth, through trade and development linkages, including support for the private sector, and social sector development, taking account of country ownership. ( See Chart on Aid at a Glance ).

The European Community's regional, sectoral and horizontal strategies now more clearly display an overall sense of vision, though still requiring attention to implementation issues. Country Strategy Papers (CSP) have become a central mechanism for developing policy coherence and co-ordination with Member States. There has been success with policy coherence through the important "Everything But Arms" initiative that opens market access for the least developed countries. However, there is a need to take account of developing country interests in the European Community's internal policies, for example the Common Agricultural Policy and the Common Fisheries Policy and other policy areas. The DAC recommended that the European Commission further develop its analytical capacity to develop the CSP as a management tool and to engage more effectively in dialogue about the impact of Community policies.

The European Commission has made substantial progress since January 2001 with organisational and management reforms of its development and humanitarian aid system. Of particular note are improvements to accountability at all levels, the introduction of the CSP process, the speedy and efficient delivery of humanitarian aid, the clarification of the links between relief and development, improved evaluation systems, and progress in the decision-making process with Member States and with "deconcentration" of authority to field offices. The DAC welcomed the European Commission's commitment to implement speedily the DAC Recommendation on aid untying. The DAC also took note of the aim in the Barcelona Declaration of moving beyond the Recommendation to benefit all developing countries. In this regard, more work needs to be done for further aid untying and harmonisation of procedures with other donors in line with DAC discussions. Several issues for the reform process remain: sustaining political support, including more strategic roles for the Council and Parliament; developing organisational capacity to make deconcentration work; and ensuring appropriate and sufficient staffing to strengthen implementation. The DAC recommended the European Commission simplify its procedures further and delegate greater authority to field offices.

Mr Koos Richelle, Director-General for Development Co-operation, led the European Commission delegation at the Peer Review. The examining countries were Canada and Norway. See the main findings and Recommendations .